Malawi Cuts Benchmark Interest Rate to 24% Amid Inflation Easing

The Reserve Bank of Malawi has announced a reduction in its benchmark interest rate by 200 basis points to 24%, a decision made during the first Monetary Policy Committee (MPC) meeting under the new governor, George Partridge. This rate cut marks the first adjustment since February 2024, when Malawi faced persistent inflation and currency pressures.

The MPC noted a gradual easing of inflationary pressures, with inflation declining for three consecutive months to 24.9% year-on-year in January, although it remains above 20% since mid-2022, indicating elevated price pressures. The central bank's decision reflects cautious optimism regarding the country's improving inflation outlook and aims to support economic recovery while maintaining vigilance against inflation risks.

This policy move is part of broader efforts by President Peter Mutharika to revive Malawi's fragile economy, which continues to grapple with significant fiscal pressures and public debt estimated at 90% of gross domestic product (GDP).